APS administrators agree to pay cut

May 29, 2013

ALPENA - The Alpena Public Schools Board of Education approved contract extensions for its 15 administrators through June 2015 during a meeting on Wednesday, with administrators voluntarily agreeing to 10 percent wage reductions beginning July 1 as part of the process to try and make more funds available. This reduction puts wages back at the level they were in 2003.

"We appreciate the fact that administrators have once again stepped up to help the district achieve necessary budget reductions," board President Diane Shields said. "Our administrators have led the way in the past by agreeing to cost-saving measures with health and prescription drug insurances and this is another instance of them leading by example to do what's best for kids and the organization."

The board has been working on a deficit elimination plan with a 10 percent across-the-board reduction of wages from all employee groups.

"We recognize that a 10 percent cut is a sacrifice and don't take that lightly no matter the employee group," Sheilds said.

Superintendent Brent Holcomb said this was one of the only ways the board would be able to bring the budget in line, by working with the staff on concessions, and that it has been clear for a couple years cuts might need to be implemented.

"To the credit of our building principals and the administrative staff, they were willing to take the lead," Holcomb said. "They are agreeable to insurance changes that will save the district revenue."

The revenue savings is around $142,000 in wages.

The board also adopted the 80/20 cost sharing model for health insurance as its choice of compliance obligations for the 2013-14 fiscal year.

"Either we would default to the hard cap, or choose to pass the 80/20," Diane Block, assistant superintendent for operations and Title I director, said.

This 80/20 agreement is what the employees already had in place and keeps their contributions manageable, she said.. The agreement also allows the board to adjust future insurance subject to the districts needs.

"We are proposing changes in health insurance packages to be able to offer all employees less expensive options and proposing adjustments to the prescription drug co-pay to reduce cost," Holcomb said. "We will include administrators in the mix.

"Of late, all employees have taken significant hits to their compensation."

All employees, including administrators, currently pay 20 percent of the cost of insurance benefits. All pay up to 7 percent toward retirement benefits, and an additional 3 percent toward their post-retirement benefits by state mandate. The employee 20 percent share of insurance premiums costs the average employees another 5-10 percent.

"These are difficult times for schools in Michigan and Alpena has been hit particularly hard because of the declining enrollment. We are grateful that we have employees who recognize what must be done to stave off the dysfunction other communities are experiencing. We will continue to be a first-rate school," Holcomb said.

Holcomb agreed to a 10 percent cut to his contract in March.

Administrator contracts extend beyond the school year with roughly half being year round and include additional duties beyond building assignments. In addition to principalships at the nine instructional buildings, administrator duties provide special education, career and technical education, technology, curriculum, athletics, and central office oversight.